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Emerging Markets DatafileDecember 30, 2003
THE STANDARD
HONG KONG
ENGLISH
Funds keen to be more open, survey finds, THE STANDARD
Mukul Munish
ASIA
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Fund managers are finally agreeing improvements need to be made in the flow of information about funds to investors, a survey has revealed.
Fund tracking company Morningstar, which conducted the survey recently among European fund managers, said 35 per cent of the fund houses surveyed said risk information was the area of most improvement, while 18 per cent said information on the fee structure was key to better communications. Twenty-nine per cent said they emphasised the importance of fund strategy and style, while 11 per cent would like to provide more fund information to investors.
The survey comes at a time when questions have been raised about the strategy followed by fund houses in dealing with their clients, especially on the issue of timing of buying and selling funds which favours institutional clients.
A number of top-tier United States fund managers, like Putnam and Fidelity, have been pulled up by the Securities and Exchange Commission (SEC) for employing unethical trading practises, including late trading and market timing. In Hong Kong, investors have become more concerned about the types of funds and fund managers after the investigations in the US.
Sally Wong, executive director of the Hong Kong Investment Funds’ Association (HKIFA), said a recent survey by the association showed 34 per cent of fund investors wanted to know about the risk level of the fund before investing.
Forty-two per cent of the respondents considered the rate of return an important factor when selecting funds. About 35 per cent looked at security, image and the firm’s reputation. Niklas Tell, director of fund analysis at Morningstar Europe, said although fund managers wanted to share more information about the operation of the funds, they were reluctant to reveal their personal stakes.
“It does not seem likely fund management groups will provide information on the personal stakes fund managers have in their own funds,” Tell said.
Only 13 per cent of the fund managers surveyed said they provided such information, while 6 per cent said they planned to do so in 2004.
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